The Post Chaser [1982] 1 All ER 19

Shipping law – Contract – Declaration of shipment

Facts

The sellers agreed to sell a quantity of palm-oil to the buyers who had contracted to sell this onto sub-buyers. A clause in the contract required the sellers to send a declaration of shipment to the buyers in writing as soon as possible after the ship set sail. The sellers gave the declaration a month after the ship had set sail and the buyers did not protest the time delay. The sellers also handed the documents directly to the sub-buyer at the request of the first buyer. It was then the sub-buyers that rejected the documents. The buyers followed this and the sellers sold the oil, less money, elsewhere. The sellers then brought an action claiming the difference in the money that was lost as damages.

Issue

The issue, in this case, was whether the buyer could reject the shipment sent by the seller. Specifically, the court had to look whether the buyer had waived their rights to claim against the delay in the sending the declaration of shipping or whether it would be inequitable to the seller to allow them to do so.

Decision/Outcome

The seller’s claim for damages was rejected. The court found that the declaration of the shipment was an essential step in this sale process, particularly with a view to the timings requested by the buyer. However, the court found that they had waived their rights to claim against error/delay by requesting that the documents are submitted directly to the sub-buyers. On this basis, the buyers were not found to be inequitable in their actions in rejecting the documents.